Gold price fell for a fourth straight day to its lowest since late December on Wednesday,sucked into a broad-based sell-off that dented global markets on the back of alarm over political turmoil in Greece.

Gold dropped along with other more industrial commodities such as copper and crude oil,under pressure from the rise of the dollar,which put silver on track for its longest stretch of consecutive daily losses in nearly four years.

Fears of a Greek exit from the euro zone worsening the debt crisis facing other European nations gripped financial markets on Wednesday,sending shares and other riskier assets lower as investors shifted funds into safe havens like the U.S. dollar.

The euro touched four-month lows against the dollar,Spanish and Italian bond yields soared,while European equities hit their lowest level for the year.

Spot gold was down 0.6 percent at $1,534.54 an ounce by 1015 GMT,having dropped by nearly 3.8 percent in the last four days. The price was set for its longest stretch of consecutive losses in nearly five months.

It’s difficult to see a turnaround just yet. There will be one,but I don’t think this is the time,just when we are in the eye of the storm,Societe Generale analyst Robin Bhar said.

Clearly,with people staring into the abyss,it could (fall) $50 or even $100 lower as it washes out. That is the unpredictability of it all and as equities fall,as the Greeks take money out of the banks and the banking sector collapses,I suppose you’d have to be wary of further price falls just to cover for losses in other markets,he said.

Gold tends to trade inversely to the dollar,so that strength in the U.S. unit encourages non-U.S. investors to sell their gold in exchange for greater profits in their own currencies.

Undermining investor sentiment,Greece’s president spoke of fear that could develop into panic at the country’s banks in the weeks before fresh elections that could precipitate Athens exit from the euro zone,while evidence emerged of locals pulling their euro funds out of banks for fear of their country’s exit from the currency bloc.

BIG BULLS HOLD

In a small positive for gold,billionaire fund manager John Paulson held on to his stake in the world’s largest gold-backed exchange-traded fund,the SPDR Gold Trust,in the first quarter of this year,according to a regulatory filing by his company released on Tuesday.

The prospect of improvement in physical demand for gold from the Indian jewellery sector took a knock on Wednesday with the drop in the rupee to a record low against the dollar,driven by the widespread risk aversion rattling global markets.

Buying in India,the world’s largest bullion consumer,has emerged with the decline in the dollar-denominated gold price to 4-1/2 month lows this week,but local dealers have said the weakness in the rupee could curb this.

Definitely physical buying has gone up,although demand is not overwhelming. Indonesia has slowed down because there’s a public holiday tomorrow,while Thailand is buying,said a dealer in Singapore.

India did buy gold last night. They are not really in the market yet today,but I am sure they will be buying.

The wedding season is underway in India and will taper off by the end of the month. Gold jewellery is an essential part of the dowry Indian parents give to their daughters at weddings.

In other precious metals,silver was down nearly 1 percent on the day at $27.44 an ounce,having fallen for eight days in a row,its longest losing streak since a 10-day decline that began in late August 2008,just before the global financial crisis claimed some of Wall Street’s biggest banks.

Silver has lost nearly 11.5 percent in this time,compared with a 6-percent decline in the gold price over the same number of days.

This has left the gold/silver ratio — the number of ounces of silver needed to buy one ounce of gold — at 56.07,its highest since the start of the year. The higher the ratio,the greater the outperformance of gold relative to silver.

Platinum eased by 0.2 percent to $1,420.00 an ounce and was on the verge of wiping out all of its gains for the year to date. So far in 2012,platinum is showing a 2.2 percent gain,having retreated from a year-to-date gain of 27 percent in late February.

Palladium was virtually flat on the day at $593.20,having fallen to its lowest since late November.